There is no shortage of startups who had amazing products but failed to get the traction they deserved. There’s no use in solving a killer problem if you can’t convince people to use your solution. And the first people you need to convince are investors, a.k.a. VCs.
Venture capitalists are human too and when they see so many pitches, they all begin to blur into one. They are shown so many numbers and charts that it’s impossible to keep track of who’s who. In a short pitch, what they can do is to get a strong first impression of you based on your story. They can buy into your team and your mission which gives them an emotional tie. They can start to visualize the future with you. Here are the 3 reasons why you should invest in storytelling.
Become more memorable
When you pitch, the goal isn’t an instant investment, it’s to get your foot in the door so the investor wants to hear more from you. It’s in these later meetings where the details can be ironed out. The first hurdle is to ensure they remember you amongst the many companies who have presented to them.
Stories are the perfect vehicle to be memorable. Think about what has survived from history to the modern-day. Everyone from Shakespeare to the Bible used stories to get their messages across and they are still being analyzed many years later. Almost everything we know about the cultures of people from the past comes from the tales left behind by their storytellers.
This is all due to human psychology. Individual bits of information without a connection are hard to remember but a story chunks together several pieces in a way our mind can store. It’s why Dr. Barbara Oakley teaches chunking as a core method for people to improve their retention. Investors aren’t likely to remember all the various numbers you give them but they will remember your story and how it resonated with them. When they go through their to-do list to see which companies to reach out to, you want them to have instant recognition. This makes it much more likely they will follow up with you.
Inspire your audience
Our brains are hardwired to love good stories. Stories inspire people to work together en masse even when they don’t have a strong personal rapport yet. They’ve helped build nations, empires and even religions even before the time of social media.
You can see evidence of our natural tendency to love stories through the growth of any child. I saw my 2-year-old go from chewing on books to discussing the finer points of the story in the space of mere months. Stories can make the imagination of both children and adults run wild which is exactly what you want. You want the investor to be able to envision your company booming in a few years’ time. You also want them to see how they can be a part of that vision.
Airbnb has a great story that many people can buy into. They started simply to host people for a design conference when all the hotels were full. Yet they enjoyed the experience so much that it seeded the foundation for a multi-billion dollar company. It inspired their mission of having anywhere in the world feel like home for their customers. This grand vision encouraged investors to pump money into the company because they wanted to see this mission fulfilled. The boldness of it also meant the size of the potential market was massive.
It’s ok to dream big even if you’re at the early stages of your company. In fact it’s a must. Venture capitalists want to see the potential for hyper-scale and it’s up to you to tell a big, visionary story they can believe in, with numbers and a product that can back it up.
Increase your likeability
What some founders forget is that a venture capitalist might think your business idea is brilliant but they don’t bring out their checkbook because they don’t think you are the right person to run it. They are investing in the early team as much as the concept itself. The path to IPO can be long and stressful so they want to know you will be easy to work with. They will have invested in more than just one startup and the more they trust you, the less of their scarce time they will need to provide.
When you weave your personal story into that of the startup, it makes you more relatable at a personal level. They can understand your drive and motivation to make a more informed decision about your personality. Each investment has unknowns but if they are sure they like you, it can help to put their mind at ease.
A great example of a founder story being intertwined with a brand is Walker & Co. The founder, Tristan Walker, had a problem with shaving using the existing options on the market. Through talking to other African Americans, he realized it was a common problem and source of insecurity. By creating a company to address this issue, he wasn’t just trying to make money but solve a problem that had plagued him and his community for his entire life. Eventually, Procter & Gamble bought the company for $40M, but he’s still the CEO and continuing along with his mission.
It’s smart business thinking from venture capitalists too as consumers are 4X more likely to buy from purpose-driven companies.
You now know storytelling is important and you are hopefully already thinking about how to portray your company to investors. The story-building stage shouldn’t be rushed because it’s so important to the startup’s future. Take your time and practice what you intend to say. Get feedback from those around you and tinker based on what they say. If people don’t understand what your company does without needing a PhD. in computer science then you aren’t explaining clearly enough.
One perfect pitch could earn you millions of dollars in investment so spending time and effort on getting your story perfect is a no-brainer.
Donna Griffit, a corporate storyteller and pitch alchemist, has helped over 1000 startups, corporates and investors raise hundreds of millions of dollars.
ⓒ 2021 Techbyandroid.com All rights reserved. Do not reproduce without permission.